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Photronics Reports First Quarter Fiscal 2024 Results
Source: Nasdaq GlobeNewswire / 21 Feb 2024 06:30:00 America/New_York
BROOKFIELD, Conn., Feb. 21, 2024 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its first quarter of fiscal year 2024 ended January 28, 2024.
“First quarter revenue increased year-over-year even though typically lower seasonal demand was weaker than anticipated, especially in the beginning of the quarter. Order rates improved through the quarter, continuing into second quarter,” said Frank Lee, chief executive officer. “High-end IC revenue increased both sequentially and year-over-year, primarily in 22nm and 28nm nodes, as customers continue migration to these nodes for improved performance and optimal cost. High-end FPD also increased over last year’s first quarter, but decreased from the fourth quarter due to typically lower seasonal demand for premium smartphone displays that use AMOLED technology. Operating margin increased year-over-year, but contracted sequentially, resulting from operating leverage in the year-over-year result and the impact of higher operating expenses in the sequential comparison. Cash generation remains strong, further strengthening our balance sheet with ample liquidity for our profitable growth investments. The Photronics team continues their outstanding performance, and with expectations for growth in the second quarter, we are building momentum for another record year in 2024.”
First Quarter Fiscal 2024 Results
- Revenue was $216.3 million, up 2% year-over-year and down 5% sequentially
- GAAP net income attributable to Photronics, Inc. shareholders was $26.2 million, or $0.42 per diluted share, compared with $14.0 million, or $0.23 per diluted share in the first quarter 2023 and $44.6 million, or $0.72 per diluted share in the fourth quarter of 2023
- Non-GAAP net income attributable to Photronics, Inc. shareholders was $29.9 million, or $0.48 per diluted share, compared with $24.4 million, or $0.40 per diluted share in the first quarter 2023 and $37.2 million, or $0.60 per diluted share in the fourth quarter of 2023
- IC revenue was $157.6 million, up 1% year-over-year and down 4% sequentially
- FPD revenue was $58.7 million, up 8% from the same quarter last year and down 7% sequentially
- Cash generated from operating activities was $41.5 million, and cash invested in organic growth through capital expenditures was $43.3 million; we received $1.1 million in government incentives for investments made
- Cash balance at the end of the quarter was $508.5 million, with $13.0 million in short-term investments and $23.4 million in debt
Second Quarter Fiscal 2024 Guidance
For the second quarter of fiscal 2024, Photronics expects revenue to be between $226 million and $236 million and non-GAAP net income attributable to Photronics, Inc. shareholders to be between $0.50 and $0.58 per diluted share.
Webcast
A webcast to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, February 21, 2024. The call will be broadcast live and on-demand on the Events and Presentations link on the Photronics website. Analysts and investors who wish to participate in the Q&A portion of the call should click here. It is suggested that participants register fifteen minutes prior to the call's scheduled start time.
About Photronics
Photronics is a leading worldwide manufacturer of integrated circuit (IC) and flat panel display (FPD) photomasks. High precision quartz plates that contain microscopic images of electronic circuits, photomasks are a key element in the IC and FPD manufacturing process. Founded in 1969, Photronics has been a trusted photomask supplier for over 50 years. As of October 31, 2023, the company had approximately 1,885 employees. The company operates 11 strategically located manufacturing facilities in Asia, Europe, and North America. Additional information on the company can be accessed at www.photronics.com.
Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements” regarding our industry, our strategic position, and our financial and operating results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially. Please refer to the documents we file with the Securities and Exchange Commission. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. These certain factors can be found at www.photronics.com/riskfactors. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements after the date of this release to conform these statements to actual results.
Non-GAAP Financial Measures
Non-GAAP Net Income attributable to Photronics, Inc. shareholders and non-GAAP earnings per share, Free Cash Flow, and Net Cash are “non-GAAP financial measures” as such term is defined by the Securities and Exchange Commission, and may differ from similarly named non-GAAP financial measures used by other companies. The attached financial supplement reconciles Photronics, Inc. financial results under GAAP to non-GAAP financial information. We believe these non-GAAP financial measures that exclude certain items are useful for analysts and investors to evaluate our future on-going performance because they enable a more meaningful comparison of our projected performance with our historical results. These non-GAAP metrics are not intended to represent funds available for our discretionary use and are not intended to represent, or be used as a substitute for, gross profit, operating income, net income, cash and cash equivalents, or cash flows from operations, as measured under GAAP. The items excluded from these non-GAAP metrics, but included in the calculation of their closest GAAP equivalent, are significant components of the condensed consolidated balance sheets and statement of cash flows and must be considered in performing a comprehensive assessment of overall financial performance. Please refer to the non-GAAP reconciliations on the following pages.
For Further Information:
John P. Jordan
Executive Vice President & CFO
203.740.5671
jjordan@photronics.comPHOTRONICS, INC. Condensed Consolidated Statements of Income (in thousands, except per share amounts) (Unaudited) Three Months Ended January 28,
2024October 31,
2023January 29,
2023Revenue $ 216,334 $ 227,473 $ 211,090 Cost of goods sold 137,079 142,591 135,013 Gross Profit 79,255 84,882 76,077 Operating Expenses: Selling, general and administrative 18,321 16,731 16,818 Research and development 3,445 3,367 3,302 Total Operating Expenses 21,766 20,098 20,120 Operating Income 57,489 64,784 55,957 Non-operating (loss) income, net (3,747 ) 18,660 (14,425 ) Income Before Income Tax Provision 53,742 83,444 41,532 Income tax provision 14,660 20,288 12,582 Net Income 39,082 63,156 28,950 Net income attributable to noncontrolling interests 12,902 18,545 14,964 Net income attributable to Photronics, Inc. shareholders $ 26,180 $ 44,611 $ 13,986 Earnings per share: Basic $ 0.43 $ 0.73 $ 0.23 Diluted $ 0.42 $ 0.72 $ 0.23 Weighted-average number of common shares outstanding: Basic 61,455 61,290 60,894 Diluted 62,283 62,067 61,470 PHOTRONICS, INC. Condensed Consolidated Balance Sheets (in thousands) (Unaudited) January 28,
2024October 31,
2023Assets Current assets: Cash and cash equivalents $ 508,518 $ 499,292 Short-term investments 12,996 12,915 Accounts receivable 203,607 194,927 Inventories 50,680 49,963 Other current assets 31,876 28,353 Total current assets 807,677 785,450 Property, plant and equipment, net 742,671 709,244 Other assets 32,488 31,527 Total assets $ 1,582,836 $ 1,526,221 Liabilities and Equity Current liabilities: Current portion of long-term debt $ 20,771 $ 6,621 Accounts payable and accrued liabilities 164,518 178,602 Total current liabilities 185,289 185,223 Long-term debt 2,655 17,998 Other liabilities 47,838 47,391 Photronics, Inc. shareholders' equity 1,022,956 975,008 Noncontrolling interests 324,098 300,601 Total equity 1,347,054 1,275,609 Total liabilities and equity $ 1,582,836 $ 1,526,221 PHOTRONICS, INC. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) Three Months Ended January 28,
2024January 29,
2023Cash flows from operating activities: Net income $ 39,082 $ 28,950 Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization 20,702 19,105 Share-based compensation 2,573 1,821 Changes in operating assets, liabilities and other (20,849 ) (22,196 ) Net cash provided by operating activities 41,508 27,680 Cash flows from investing activities: Purchases of property, plant and equipment (43,314 ) (31,097 ) Purchases of available-for-sale debt securities (2,436 ) - Proceeds from maturities of available-for-sale debt securities 2,500 - Government incentives 1,091 1,014 Other (56 ) (87 ) Net cash used in investing activities (42,215 ) (30,170 ) Cash flows from financing activities: Repayments of debt (1,194 ) (9,218 ) Proceeds from share-based arrangements 936 672 Net settlements of restricted stock awards (2,613 ) (1,168 ) Net cash used in financing activities (2,871 ) (9,714 ) Effects of exchange rate changes on cash, cash equivalents, and restricted cash 13,026 27,499 Net increase in cash, cash equivalents, and restricted cash 9,448 15,295 Cash, cash equivalents, and restricted cash, beginning of period 501,867 322,409 Cash, cash equivalents, and restricted cash, end of period $ 511,315 $ 337,704 PHOTRONICS, INC. Reconciliation of GAAP to Non-GAAP Financial Information (in thousands) (Unaudited) Three Months ended January 28,
2024October 31,
2023January 29,
2023Reconciliation of GAAP to Non-GAAP Non-operating (loss) Income: GAAP Non-operating (loss) income, net $ (3,747 ) $ 18,660 $ (14,425 ) FX (gain) loss 8,909 (13,234 ) 16,944 Non-GAAP Non-operating (loss) income, net $ 5,162 $ 5,426 $ 2,519 Reconciliation of GAAP to Non-GAAP Income tax provision: GAAP Income tax provision $ 14,660 $ 20,288 $ 12,582 Estimated tax effects of FX (gain) loss (2,244 ) 3,437 (4,506 ) Non-GAAP Income tax provision $ 16,904 $ 16,851 $ 17,088 Reconciliation of GAAP to Non-GAAP Noncontrolling interests: GAAP Noncontrolling interests $ 12,902 $ 18,545 $ 14,964 Estimated noncontrolling interest effects of above (2,939 ) 2,431 (2,060 ) Non-GAAP Noncontrolling interests $ 15,841 $ 16,114 $ 17,024 Reconciliation of GAAP to Non-GAAP Net Income: GAAP Net Income $ 26,180 $ 44,611 $ 13,986 FX (gain) loss 8,909 (13,234 ) 16,944 Estimated tax effects of above (2,244 ) 3,437 (4,506 ) Estimated noncontrolling interest effects of above (2,939 ) 2,431 (2,060 ) Non-GAAP Net Income $ 29,906 $ 37,245 $ 24,364 Weighted-average number of common shares outstanding - Diluted 62,283 62,067 61,470 Reconciliation of GAAP to Non-GAAP EPS: GAAP diluted earnings per share $ 0.42 $ 0.72 $ 0.23 Effects of the above adjustments $ 0.06 $ (0.12 ) $ 0.17 Non-GAAP diluted earnings per share $ 0.48 $ 0.60 $ 0.40 PHOTRONICS, INC. Reconciliation of GAAP to Non-GAAP Financial Information (cont.) (in thousands) (Unaudited) Reconciliation of Net cash provided by operating activities to Free Cash Flow Three Months Ended January 28,
2024GAAP Net cash provided by operating activities $ 41,508 Purchases of property, plant and equipment (43,314 ) Free Cash Flow $ (1,806 ) Reconciliation of Cash and cash equivalents to Net Cash: As of January 28,
2024October 31,
2023January 29,
2023Cash and cash equivalents $ 508,518 $ 499,292 $ 334,792 Current portion of Long-term debt (20,771 ) (6,621 ) (6,541 ) Long-term Debt (2,655 ) (17,998 ) (27,323 ) Net Cash $ 485,092 $ 474,673 $ 300,928 
